83R7565 NC-F
By: Harper-Brown H.B. No. 1824
A BILL TO BE ENTITLED
AN ACT
relating to the operation of master mixed-use property owners'
associations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 215.003, Property Code, is amended to
read as follows:
Sec. 215.003. APPLICABILITY OF CHAPTER 209. Chapter 209
does not apply to [Sections 209.007, 209.008, 209.011, and 209.012
apply only to single-family residential properties governed by] a
property owners' association subject to this chapter.
SECTION 2. Section 215.008, Property Code, is amended by
adding Subsection (d) to read as follows:
(d) Notwithstanding any provision of the certificate of
formation, declaration, or bylaws to the contrary, the declaration
and any supplementary declaration, including amendments,
modifications, or corrections, may be amended by a simple majority
of the eligible votes being cast in favor of the amendment.
SECTION 3. Chapter 215, Property Code, is amended by adding
Section 215.0135 to read as follows:
Sec. 215.0135. ASSOCIATION RECORDS. (a) To the extent of
any conflict or inconsistency, this section prevails over other
provisions of law and the dedicatory instruments of a property
owners' association subject to this chapter. This section is the
exclusive procedure for a property owner to inspect the books and
records of the association.
(b) Except as provided by Subsection (c) or (j), a property
owners' association shall, on written request as provided by this
section, make the books and records of the association open to and
reasonably available for examination by an owner or a person
designated in a written instrument signed by the owner as the
owner's agent, attorney, or certified public accountant. Except as
provided by Subsection (c) or (j), an owner is entitled to obtain
copies of the books and records from the association.
(c) An attorney's files and records relating to the property
owners' association, excluding invoices, are not records of the
association and are not subject to inspection by the owner or the
owner's authorized representative or to production in a legal
proceeding. This subsection does not require production of a
document that is covered by the attorney-client privilege.
(d) An owner or the owner's authorized representative
described by Subsection (b) must submit a written request by
certified mail to the mailing address of the property owners'
association or the association's authorized representative, as
reflected on the most current management certificate filed under
Section 215.013, for access to the books and records of the
association. The request must describe, in sufficient detail, the
association's books and records requested by the owner or the
owner's representative and:
(1) if an inspection is requested, the association
shall, on or before the l0th business day after the date the
association receives the request, send written notice of dates that
the owner may inspect, during normal business hours, the requested
books and records to the extent those books and records are in the
actual physical possession, custody, and control of the
association; or
(2) if copies of identified books and records are
requested, the association shall, to the extent those books and
records are in the actual physical possession, custody, and control
of the association, produce copies of the requested books and
records on or before the 10th business day after the date the
association receives the request, except as otherwise provided by
this section.
(e) If the property owners' association fails to produce the
books or records requested under Subsection (d) on or before the
l0th business day after the date the association receives the
request, the association must provide to the requestor written
notice that:
(1) informs the requestor that the association is
unable to produce the information and the specific reasons for that
inability on or before the 10th business day after the date the
association received the request; and
(2) if the association can produce the information,
notifies the requestor of the date by which the information will be
sent or made available for inspection to the requesting party,
which may not be later than the 15th day after the date notice under
this subsection is given.
(f) If an inspection is requested or required, the
inspection shall take place at a mutually agreed on time during
normal business hours of the property owners' association, and the
requesting party shall identify the books and records for the
association to copy and forward to the requesting party.
(g) A property owners' association may produce books and
records requested under this section in hard copy, electronic, or
other format reasonably available to the association.
(h) A property owners' association board must adopt a
records production and copying policy that prescribes the costs the
association will charge for the compilation, production, and
reproduction of information requested under this section. The
prescribed charges may include all reasonable costs of materials,
labor, and overhead but may not exceed costs that would be
applicable for an item under 1 T.A.C. Section 70.3. The policy
required by this subsection must be recorded as a dedicatory
instrument. If the policy is not recorded, the association may not
charge an owner for the compilation, production, or reproduction of
information requested under this section. If the policy is
recorded, the requesting owner or the owner's representative is
responsible for all costs related to the compilation, production,
and reproduction of the requested information based on the amounts
prescribed by the policy. The association may require advance
payment of the estimated costs of compilation, production, and
reproduction of the requested information. If the total of the
estimated costs differs from the total of the actual costs, the
association shall submit a final invoice to the owner on or before
the 30th business day after the date the requested copies are
delivered. If the actual total cost is higher than the estimated
total cost, and the owner fails to reimburse the association before
the 30th business day after the date the invoice is sent to the
owner, the association may add the amount due to the owner's account
as an assessment. If the actual total cost is less than the
estimated total cost, the association shall issue a refund to the
owner not later than the 30th business day after the date the
requested copies are delivered.
(i) A property owners' association must estimate costs
under this section using amounts prescribed by the policy adopted
under Subsection (h).
(j) Information may be released in an aggregate or summary
manner that would not identify an individual property owner. Except
as provided by Subsection (k) and to the extent the information is
provided in the meeting minutes, the property owners' association
is not required to release or allow inspection of any books or
records that identify:
(1) the dedicatory instrument violation history of an
individual owner;
(2) an owner's personal financial information,
including records of payment or nonpayment of amounts due the
association;
(3) an owner's contact information, other than the
owner's address;
(4) an owner's property files or building plans;
(5) books or records described by Subsection (c);
(6) any information to which an owner objects to
releasing or has not granted approval for releasing; or
(7) information related to an employee of the
association, including personnel files.
(k) The books and records described by Subsection (j) shall
be released or made available for inspection if:
(1) the express written approval of the owner whose
records are the subject of the request for inspection is provided to
the property owners' association; or
(2) a court orders the release of the books and records
or orders that the books and records be made available for
inspection.
(l) A property owners' association shall adopt and comply
with a document retention policy that includes, at a minimum, the
following requirements:
(1) certificates of formation, bylaws, restrictive
covenants, and all amendments to the certificates of formation,
bylaws, and covenants shall be retained permanently;
(2) financial books and records shall be retained for
seven years;
(3) account records of current owners shall be
retained for five years;
(4) contracts with a term of one year or more shall be
retained for four years after the expiration of the contract term;
(5) minutes of meetings of the owners and the board
shall be retained for seven years; and
(6) tax returns and audit records shall be retained
for seven years.
(m) A member of a property owners' association who is denied
access to or copies of the association books or records to which the
member is entitled under this section may file a petition with the
county court at law in which all or part of the property that is
governed by the association is located requesting relief in
accordance with this subsection. If the county court at law finds
that the member is entitled to access to or copies of the records,
the county court at law may grant one or more of the following
remedies:
(1) a judgment ordering the association to release or
allow access to the books or records;
(2) a judgment against the association for court costs
and attorney's fees incurred in connection with seeking a remedy
under this section; or
(3) a judgment authorizing the owner or the owner's
assignee to deduct the amounts awarded under Subdivision (2) from
any future regular or special assessments payable to the
association.
(n) If the property owners' association prevails in an
action under Subsection (m), the association is entitled to a
judgment for court costs and attorney's fees incurred by the
association in connection with the action.
(o) On or before the 10th business day before the date a
person brings an action against a property owners' association
under this section, the person must send written notice to the
association of the person's intent to bring the action. The notice
must:
(1) be sent certified mail, return receipt requested,
or delivered by the United States Postal Service with signature
confirmation service, to the mailing address of the association or
the association's authorized representative as reflected on the
most current management certificate filed under Section 215.013;
and
(2) describe with sufficient detail the books and
records being requested.
(p) For the purposes of this section, "business day" means a
day other than Saturday, Sunday, or a state or federal holiday.
SECTION 4. Chapter 215, Property Code, is amended by adding
Sections 215.016, 215.017, and 215.018 to read as follows:
Sec. 215.016. NOTICE REQUIRED BEFORE CERTAIN ENFORCEMENT
ACTIONS. (a) Before a property owners' association may file a suit
against an owner, other than a suit to collect a regular or special
assessment or judicial foreclosure under the association's lien, or
charge an owner for property damage, the association or its agent
must give written notice sent to the owner by certified mail, return
receipt requested, to the property address of the owner.
(b) The notice must:
(1) describe the violation of the declaration or
property damage that is the basis for the suit or charge and state
any amount due to the association from the owner; and
(2) inform the owner that the owner:
(A) is entitled, as applicable, to a reasonable
period to cure the violation and avoid the suit unless the owner was
previously given notice and a reasonable opportunity to cure by the
association for the same or a similar violation within the
preceding six months;
(B) may request a hearing under Section 215.017
on or before the 30th day after the date the owner receives the
notice; and
(C) may have special rights or relief related to
the suit or charge under federal law, including, without
limitation, the Servicemembers Civil Relief Act (50 U.S.C. app.
Section 501 et seq.), if the owner is serving on active military
duty.
Sec. 215.017. HEARING BEFORE BOARD. (a) Except as provided
by Section 215.009(c), if the owner is entitled to an opportunity to
cure a violation, the owner has the right to submit a written
request for a hearing to discuss and verify facts and resolve the
matter at issue before a committee appointed by the board of the
property owners' association or before the board if the board does
not appoint a committee.
(b) The association shall hold a hearing under this section
not later than the 30th day after the date the board receives the
owner's request for a hearing and shall notify the owner of the
date, time, and place of the hearing not later than the 10th day
before the date of the hearing. The board or committee or the owner
may request a postponement, and if requested, a postponement shall
be granted for a period of not more than 10 days. Additional
postponements may be granted by agreement of the parties.
(c) The notice and hearing provisions of this section and
Section 215.016 do not apply if the association files a suit seeking
a temporary restraining order or temporary injunctive relief or a
suit that includes foreclosure as a cause of action.
Sec. 215.018. ALTERNATIVE PAYMENT SCHEDULE FOR CERTAIN
ASSESSMENTS. (a) A property owners' association shall adopt
reasonable guidelines to establish an alternative payment schedule
by which an owner may make partial payments to the association for
delinquent regular or special assessments or any other amount owed
to the association without accruing additional monetary penalties.
For purposes of this section, monetary penalties do not include
reasonable costs associated with administering the payment plan or
interest.
(b) A property owners' association is not required to enter
into a payment plan with an owner who failed to honor the terms of a
previous payment plan.
(c) A property owners' association shall file the
association's guidelines under this section in the real property
records of each county in which any portion of the subdivision is
located.
SECTION 5. The following provisions are repealed:
(1) Section 209.003(e), Property Code, as added by
Chapter 1026 (H.B. 2761), Acts of the 82nd Legislature, Regular
Session, 2011;
(2) Section 209.003(e), Property Code, as added by
Chapter 1142 (H.B. 1821), Acts of the 82nd Legislature, Regular
Session, 2011;
(3) Section 209.003(e), Property Code, as added by
Chapter 1217 (S.B. 472), Acts of the 82nd Legislature, Regular
Session, 2011;
(4) Section 209.003(e), Property Code, as added by
Chapter 1282 (H.B. 1228), Acts of the 82nd Legislature, Regular
Session, 2011; and
(5) Section 215.009(b), Property Code.
SECTION 6. This Act takes effect September 1, 2013.